By PATRICIA PALLESCHI
Economic crash, depression, retrenchment, reshaping. These are words that describe a crisis affecting the entire world. Happily, in my forecast, there is reason for hope. In a restatement of the words of economist Paul Romer, “A crisis is a terrible thing to waste.”
Here are the grim facts. If you look at Indeed.com’s job postings on a per capita basis in the 50 top metropolitan areas in the country, Los Angeles ranks in the bottom 5 percent, while San Jose and San Francisco rank at the top of the list. Southern California has one of the highest unemployment rates in the country. My educated guess is that it also has a high underemployment rate that cannot be calculated. The ability to identify, place and develop talented and creative executives is not being addressed at the regional level.
Southern California has the ability to use this crisis, and the forthcoming aid that has been promised from the federal government, to catalyze this region into becoming a center for innovation on the Pacific Rim. It needs to develop ethical, passionate, supersmart executives in the areas that are primed for growth in Southern California. I believe those areas are sustainable energy, biotechnology, health services, new media/new technology, teaching/education, consulting for right sizing, fundraising and electronic gaming.
How did we get here? In Southern California Los Angeles and Orange counties, in particular there are pressing problems that predate this crash. The problems began in the 1990s as banks fled the area. Things worsened throughout the decade prior to 2000 as SoCal lost most major corporate headquarters to other states. The downturn of 2001 affected 150,000 jobs in the San Francisco area, but instead of SoCal picking up positions as the tech bubble burst, more key positions and companies were lost here. Even many Hollywood executives now report to higher-ups in New York or other corporate centers.
This area has been especially hurt because we were home to Countrywide, IndyMac and other similar mortgage lenders.
Job loss
However, SoCal’s economic issues encompass much more than the current credit crash. The crisis is exacerbated by the continuous loss of jobs that began 20 years ago. And most unfortunately, these have been good jobs.
SoCal has not kept pace with other regions in developing programs welcoming to startups or friendly to ongoing businesses. Moreover, untimely government intervention and legislation have accelerated job losses, especially at the corporate level. What we need is legislation at the regional level that will support a core of top talent and encourage that top talent to maintain their businesses in Southern California.
Keeping our eye on the big picture, why think of job loss as a “regional” problem? As author and thought leader Richard Florida said in the March Atlantic magazine, “Worldwide, people are crowding into a discrete number of megaregions, systems of multiple cities and their surrounding suburban rings like the Boston-New York-Washington Corridor.”
Southern California is one of those megaregions, comprising Orange, Ventura, San Diego, Riverside and Los Angeles counties. It is clearly distinguishable from Northern California and from its worldwide competitors like the Greater Tokyo area, the Shanghai-Beijing Corridor and India’s Bangalore-Mumbai area. It is exquisitely poised to benefit from the Asian megaregions because it has the ports of Los Angeles and Long Beach, and some other key infrastructure in place. It also has pockets of highly affordable housing and an extremely attractive climate. It has excellent sources of trained talent from a multitude of educational institutions.
However, Southern California is not maximizing its location or abundance of innovative, ethical, gifted people.
As I see it, in order to bring back jobs and growth of companies, a triumvirate of items must be addressed:
1) Grooming Talented People Graduates are pouring out of Caltech, Occidental, UCLA, USC, UC Irvine, etc. These emerging executives will require the networking and mentoring that allows their new ideas to incubate and gain traction. Mentoring should include ethical studies and a review of values.
2) Funding Sources Attract venture capital groups, and government and private funding sources.
3) Government for the People Bring about sustained and thoughtful government legislation that will enable entrepreneurs to grow into larger companies that will generate innovation and provide jobs. We must have legislation that encourages current companies to prosper.
Once these factors are systematically and widely addressed, SoCal will be transformed into a successful megaregion full of skill, industry, and opportunity at all levels.
Patricia Palleschi, Ph.D., is president of an executive-level employment agency in Westwood. She is a former executive at a Fortune 200 company and has taught at the Loyola Marymount University Department of Communication.
